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Britain will provide £75.6 million to Ukraine through the World Bank

   News / 07 Mar 2022

Published: 07 March 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight

Britain will provide £75.6 million to Ukraine through the World Bank, seeking to keep core state functions running and mitigate financial pressures caused by Russia's invasion, Prime Minister Boris Johnson's office said.
Sterling is suffering because of the war in Europe, falling last week to a two-month low of $1.3187. The euro slipped below $1.10 for the first time in almost two years last week as investors flocked towards the safe-haven dollar, its worst fall since the outbreak of Covid-19 in March 2020. The EU bloc currency is down almost 4% since Russia invaded Ukraine and is not far from testing its 2020 trough of $1.0636. "The euro is being picked on," Sean Callow at Westpac in Sydney told Reuters. "(The war) is on Europe's doorstep," he said, adding that “the criss-cross of pipelines from Russia through Ukraine is just indicative of how enmeshed and dependent much of Europe has become on Russian energy and that's not something you can turn around quickly. A much gloomier European growth outlook is being priced in".
Oil prices have spiked again: Brent crude - the global oil benchmark – soared above $139 a barrel over the weekend, before easing to around $130. On Sunday, British energy giant Shell defended its decision to purchase Russian crude oil, saying in a statement that the decision to purchase the fuel at a discounted price was "difficult," but that it had "no alternative".
Russian state natural gas company Gazprom is continuing to supply gas via Ukraine at the same volume as a day earlier of 109.5 million cubic metres per day, Russia's Prime news agency reports this morning.
Svein Tore Holsether, the boss of Yara International, one of the world's biggest fertiliser companies, has said the war in Ukraine will deliver a shock to the global supply and cost of food. Yara operates in more than 60 countries and buys considerable amounts of raw materials from Russia. Fertiliser prices were already high due to soaring wholesale gas prices and Holsether told the BBCthat the situation could get even tougher. "Half the world's population gets food as a result of fertilisers... and if that's removed from the field for some crops, [the yield] will drop by 50%," he said. "For me, it's not whether we are moving into a global food crisis - it's how large the crisis will be."
National Energy Action is warning that the number of fuel poor households in the UK will double in a year if the crisis in Ukraine leads to higher energy bills. Analysts are predicting that the war has pushed up wholesale prices, which could mean the average domestic bill in the UK hits £3,000 in October. The charity said that would put 8.5 million households in serious financial difficulty from fuel bills, twice the number of a year earlier, equating to 30% of homes. Age UK said such an increase would have a "devastating" impact on the health and wellbeing of older people, many of whom could go without heating for weeks.
Russian Sanctions latest:

  • American Express has halted its relationships with Russian bank partners. Meanwhile, Mastercard and Visa, who last week blocked multiple financial institutions in Russia from using their payment networks, have now extended their sanctions, announcing they will suspend all operations in Russia. Although shoppers will still be able to use the cards for purchases within Russia until they reach their expiry dates, any Visa, Mastercard or American Express cards issued abroad will no longer work at shops or ATMs in Russia. Neither will clients be able to use their Russian cards abroad or for international payments online.

  • Microsoft is suspending new sales of its products and services in Russia. "Our single most impactful area of work almost certainly is the protection of Ukraine’s cybersecurity,” the firm said in a blog post. “We continue to work proactively to help cybersecurity officials in Ukraine defend against Russian attacks, including most recently a cyberattack against a major Ukrainian broadcaster”.

  • Dell Technologies has suspended product sales in Ukraine and Russia.

  • Spotify has indefinitely closed its office in Russia, the audio streaming service has said.

  • TikTok has suspended live streaming and new content from being uploaded to its platform in Russia, citing the country's "fake news" laws.

  • General Motors says it is temporarily halting vehicle exports to Russi. The Detroit company sells about 3,000 vehicles in Russia but does not have plants based in the country. Motorcycle manufacturer Harley Davidson has also paused its business dealings in Russia.

  • Although luxury goods retailers have largely been left out of sanctions introduced by Western governments, many high-end brands are withdrawing their goods from Russia anyway, not least because many have found doing business and fulfilling orders in the region more difficult, after measures introduced by the UK, the European Union, and the US. Hermes, Kering and Chanel have all temporarily shut their shops in Russia, the firms said on Friday. The maker of pricey Birkin bags Hermes and the Swiss Cartier owner Richemont have also announced they will pause business in Russia, and LVMH, which owns brands such as Christian Dior, Givenchy and Bulgari yesterday closed its 124 boutiques in the country.

  • has removed Russian Standard vodka and Karpayskiye black sunflower seeds from its shelves, as they are 100% sourced from Russia. The Co-operative and Morrisons also stopped selling Russian Standard vodka. Sainsbury's will also re-name "Chicken Kiev" to "Chicken Kyiv". Waitrose has also removed a Russian vodka from its shelves and John Lewis will no longer sell a line of pizza oven pellets which it sources from the country.

  • JD Sports has stopped trading in Russia across both its brand websites and wholesale channels. These represent less than 0.05% of annual revenues. PayPal, Samsung and Zara have also stopped business in Russia over its invasion of Ukraine.

  • Airbnb has suspended all operations in Russia and Belarus and stopped users of the home rental site from both countries from making any bookings. The home rental firm has more than 93,000 Russian listings on Airbnb, and almost 4,000 in Belarus, according to the market research firm AirDNA. On Thursday, Airbnb waived fees for hosts and travellers booking rentals in Ukraine after members of the public began making bookings in Ukraine with no intention of travelling to provide financial support Ukrainian residents. Ukraine has more than 17,000 active short-term rental listings.

  • Etsy, the online marketplace focused on handmade or vintage items, said it will cancel all balances — about $4 million worth across listing, transaction, and other fees — owed by sellers in Ukraine on its platform.

  • Zara, Paypal and Samsung have also suspended business in Russia over the Ukraine invasion, as have accounting firms KPMG and PricewaterhouseCoopers LLP. KPMG said its Russia and Belarus firm will leave the KPMG network, a move that will affect over 4,500 partners and staff in Russia and Belarus. PwC agreed PwC Russia will leave its network. The firm has operated in Russia for more than 30 years, and has 3,700 partners and staff there, it said.

Russian businessman Vladimir Lukin has resigned from the board of holiday giant TUI in response to sanctions against his home country over its invasion of Ukraine and terminated his relationship with Russia's Severgroup, where he acted as special adviser to the CEO. Lukin is a former Human Rights Commissioner of Russia, an ex-president of the Russian Paralympic Committee, and served as the Russian Ambassador to the US from 1992 to 1994. His resignation follows the departure of billionaire Alexei Mordashov, who quit the TUI board with immediate effect on Thursday after being added to an EU list of individuals to have their assets frozen due to their close ties with the Russian president, Vladimir Putin. "The aim of the EU sanctions is to prevent Mr Mordashov from disposing of his [considerable] shares in Tui" and "from realising any proceeds or profits from his investment", the company said. Mordashov is also the chairman of Severstal, one of Russia's biggest steel producers, which has stopped deliveries to the EU.
Other Business News:
The UK jobs market hit a two-year high in February as coronavirus restrictions were lifted, according to accountancy and tax consultancy network BDO. The firm’s business trends report found the employment index rose for a fourth consecutive month to 110.75, representing a monthly gain of 0.77 points, the first time the labour market had returned to pre-pandemic levels since February 2020. A figure above the 95 level indicates growth.
The US economy added 678,000 jobs in February, well ahead of expectations. The unemployment rate also edged down to 3.8%, the US Bureau of Labor Statistics reported. Most of the rise in jobs came from the leisure and hospitality industries, which added 179,000 new roles, and at bar and restaurant companies, which filled 124,000 jobs. Employment in professional and business services increased by 95,000 jobs in February. However, the total number of jobs on US payrolls is still 2.1 million below where it was before the Covid-19 pandemic, the BBC reports.
Royal Mail is putting up the price of postage stamps from 4th April.  The price of a 1st class stamp will increase by 10p to 95p and the price of a 2nd class stamp by 2p to 68p.
Germany and France will capitalise on post-Brexit rules to force British Airways to be spun-off as a standalone airline, the chief executive of Ryanairhas claimed. Michael O’Leary said that politicians and lobbyists in the Eurozone’s two biggest economies are “gunning for” IAG, the FTSE 100airlines group that owns BA. After a hiatus of more than a year, Brussels officials are now reviewing how so-called ownership and control regulations will be applied, Yahoo Finance UK reports. Prior to Brexit, airlines operating within the EU needed to demonstrate that they were “owned and controlled” from member states, and Brexit means UK shareholders are no longer included in the EU ownership count. However, a spokesman for IAG said: “We comply with the EU ownership and control regulation. Our EU airlines’ remedial plans were approved by the national regulators in Spain and Ireland, and the IAG Board has a majority of independent EU non-executive directors.”
Vauxhall has submitted plans to build a new production facility (image) at its Ellesmere Port plant. Last year, the carmaker's parent company Stellantisannounced a £100 million investment programme at the Cheshire site, safeguarding more than 1,000 jobs.
British manufacturer Triumph has invested in a new assembly plant at its Hinckley HQ in Leicestershire and is set to more than triple the number of motorcycles it builds in the UK. 15,000 – 20,000 bikes a year will roll off the new production line.

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